How to Pay 0% Tax on Capital Gains | John Geantasio posted on the topic | LinkedIn (2024)

I've realized that many people haven't actually been taught how tax brackets work.Many people are under the impression that if you're in the 24% tax bracket, then ALL of your income is taxed at 24%.Fortunately for everyone, that is not the case. How it actually works is that (in 2024) if you are in the 24% tax bracket that means that your taxable income is either over $100,525 and you file single or your income is over $201,050 and you are married and file jointly. Whatever money you make over this amount (without hitting the next tax bracket) is taxed at 24%.The money you make between $47,150 and $100,525 for single (or $94,300 and $201,050 married filing jointly) is taxed at 22%.Between $11,600 and $47,150 for single (or $23,200 and $94,300) is taxed at 12%. The income below this is taxed at 10%.So if you're in the 24% tax bracket, your effective tax rate should be less than 24%.This structure tends to help people, come tax season, but it can tend to hurt the brain a little while you're trying to figure it out. Especially when you get into deductions, credits, and all kinds of other mind boggling topics. To get a better idea of what this looks like for you, contact a professional to get a more personalized number.*Disclosure: Lincoln Financial Securities Corp and its representatives do not offer tax or legal advice. Individuals should consult their tax or legal professionals regarding their specific circ*mstances.*

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I've realized that many people haven't actually been taught how tax brackets work.Many people are under the impression that if you're in the 24% tax bracket, then ALL of your income is taxed at 24%.Fortunately for everyone, that is not the case. How it actually works is that (in 2024) if you are in the 24% tax bracket that means that your taxable income is either over $100,525 and you file single or your income is over $201,050 and you are married and file jointly. Whatever money you make over this amount (without hitting the next tax bracket) is taxed at 24%.The money you make between $47,150 and $100,525 for single (or $94,300 and $201,050 married filing jointly) is taxed at 22%.Between $11,600 and $47,150 for single (or $23,200 and $94,300) is taxed at 12%. The income below this is taxed at 10%.So if you're in the 24% tax bracket, your effective tax rate should be less than 24%.This structure tends to help people, come tax season, but it can tend to hurt the brain a little while you're trying to figure it out. Especially when you get into deductions, credits, and all kinds of other mind boggling topics. To get a better idea of what this looks like for you, contact a professional to get a more personalized number.*Disclosure: Lincoln Financial Securities Corp and its representatives do not offer tax or legal advice. Individuals should consult their tax or legal professionals regarding their specific circ*mstances.*

📢 Attention professionals and entrepreneurs! 📢Due date for Advance Tax is approaching, and it's crucial to stay on top of your tax obligations. Advance Tax is a method of paying income tax in installments throughout the financial year, rather than paying tax in lump sum at the end.⏰ 1st Instalment Due Date: June 15th, 2023 ⏰Meeting the Advance Tax deadline is essential to avoid interest charges u/s 234A/B/C. Make sure you assess your estimated income and tax liability for the year and calculate the appropriate installment to pay. Timely compliance not only demonstrates your financial responsibility but also contributes to the smooth functioning of our economy.Here are a few key points to remember:1️⃣ Estimate your income: Assess your projected earnings for the financial year. Consider all sources of income, including salary, business profits, capital gains, and any other applicable income.2️⃣ Calculate tax liability: Based on your estimated income, compute the income tax payable as per the tax rates applicable to you. Consider any deductions or exemptions available to you.3️⃣ Determine installments: Divide your estimated tax liability into appropriate installments as per the prescribed due dates. Typically, the advance tax is payable in four installments, with specific percentages for each quarter. 1st Installment to be paid @15% of estimated Tax liability. 4️⃣ Make timely payments: Ensure you pay each installment before the due date to avoid interest charges. Various methods are available for payment, including online platforms and designated bank branches.5️⃣ Keep records: Maintain accurate records of your Advance Tax payments for reference and to streamline the return filing process.If you have any questions feel free to reach out. Let's stay ahead of our financial commitments and strive for continued success!Follow CA Chandan Sanghai for more such updates.#AdvanceTax #TaxCompliance #FinancialResponsibility #TaxObligations #TaxDeadlines #ProfessionalDevelopment

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Want to learn about another way small business owners can save? Read on to learn about Time Business Income and Deductions for Tax Savings.If you conduct your business using a pass-through entity, your shares of the business's income and deductions are passed through to you and taxed at your personal rates. Pass-through entities include:Sole proprietorships,S corporations,LLCs, andPartnerships.Assuming no legislative changes, next year's individual federal income tax rates will be the same as this year's. Plus, there will likely be significant inflation adjustments to the rate bracket thresholds. The traditional strategy of deferring income into next year while accelerating deductible expenditures into this year makes sense if you expect to be in the same or lower tax bracket next year. This strategy will, at a minimum, postpone part of your tax bill from 2023 until 2024. And, after the inflation adjustments to 2024 rate bracket thresholds, the deferred income might be taxed at a lower rate. On the other hand, if you expect to be in a higher tax bracket in 2024, take the opposite approach. That way, more income will be taxed at this year's lower rate instead of next year's higher rate.Next week, we will discuss the importance of maximizing the QBI deduction!#tax #taxplanning #savings #smallbusinessSOURCE: https://lnkd.in/gDs2myJS

Tax Tip Friday - Today we are going to tackle something contested in the accounting industry and that is estimated tax payments.The high end question - should you make them? My personal opinion is yes and this is why. When you pay quarterly estimated tax payments (especially if you are in a business where your cash fluctuates) making the estimated tax payments can be a game changer because you don't have to come up with a ton of cash at once.Technically 4 $10,000 estimated tax payments and 1 $40,000 payment are the same and they may be some penalties and interest doing it one way or the other. From a budgeting standpoint it is a heck of a lot easier to pay $10K quarterly than $40K at once.Some accountants and financial people will say, "but Kevin I can deploy that $40,000 during the year and make some money" If you are one of those people then by all means go ahead and deploy the money but at the same time don't gawk at the amount of tax you owe when the return is being filed.Pay those estimates, it will help you have a smoother year#taxtips #taxplanning #estimatedpayments #taxstrategy

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A quick primer on Capital Gains Tax rules to help you make better decisions for your situation. https://lnkd.in/dYREbqyT #capitalgainstax

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📢 ESTIMATED TAXES DUE: Attention all self-employed and small business owners! 📢Don't forget, the deadline for the 4th quarter estimated taxes of 2023 is just around the corner! ⏰ Mark your calendars for January 15th! If you receive self-employment income, interest, dividends, or capital gains, you may need to make estimated tax payments. To avoid penalties and interest, it's crucial to make these payments quarterly. Here are some quick tips to help you out:1️⃣ If your income tax withholding is not enough, consider making estimated tax payments.2️⃣ Generally, if you expect to owe $1,000 or more, you should make estimated tax payments.3️⃣ The key dates for most people are April 15, June 15, September 15, and January 15.4️⃣ Use Form 1040-ES or one-fourth of your year-end tax liability to calculate your estimated tax payments. You have various payment options available, including online, phone, check, money order, credit card, or debit card.5️⃣ To avoid penalties, make sure to pay at least 90% of your current year's tax liability or 100% of your previous year's tax liability (110% if your adjusted gross income is over $150,000).Remember to estimate your income for the year and consider any deductions and credits you're eligible for. Life changes, like getting married or having a child, can impact your taxes too!For your convenience, here are the quick links to make your estimated tax payments:IRS Online: [https://lnkd.in/dksJZQfY ]NJ Online: [https://lnkd.in/dKeUvUvx ]Thank you for your continued trust in our services. We're here to help you navigate the world of taxes! 💼📊#EstimatedTaxes #TaxTips #SelfEmployed #SmallBusinessOwners #StayCompliant #TaxSeason

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The value of tax deferral may be less or have no value at all. Many advisors focus on the value of tax deferred investment vehicles, but the 2023 income levels relative to capital gains taxation may warrant reconsideration of the value of tax deferral. Take a look at the increased 2023 income levels that trigger capital gains tax treatment. The team at First Life Advisors keeps clients aware of changes that may be relative to their situation. Firstlifeadvisors@gmail.com

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To take capital gains or not!!?? For the first income tax bracket for individuals the capital gains rate is 0%, free. This is an annual asset that everyone should use if they can. Taxpayers should also consider taking capital gains in the 15% tax bracket if they have room below the income level when the rate moves to 18.8% and they do not envision ever being in the 0% tax bracket in the future. The 0% tax rate is for income from $0-$89,250 MFJ; and 0-$44,625 Single/ Individual. The 15% tax rate is from $89,250-$250,000 Adjusted Gross Income (AGI) MFJ; and $44,625- $200,000 Adjusted Gross Income (AGI) Single. AGI is Income before Itemized Deductions are subtracted. Above income of $250,000 MFJ and $200,000 Single Adjusted Gross Income (AGI) the capital gain rate includes 3.8% Net Investment Income Tax (NIIT) which gets added to the 15% rate LT Cap Gain +NIIT= 18.8%. The LT Cap Gain rate increases to 23.8% total after $553,850 MFJ and $492,300.Having a Certified Financial Planner(TM) with a tax background help you navigate these brackets can allow you to use the asset which is the 0% and 15% capital gains brackets if you have qualified dividends and Long Term Capital Gains.This is not individual tax advice but is informational to raise the publics understanding of how the ordinary income and long term capital gains brackets work together.

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